Patent Reform Debate Returns to Congress

Coming efforts to revamp U.S. patent law could lead to less innovation and a loss in value for the companies that own patents, an executive at Qualcomm said Friday.

Roger Martin, a senior vice president and chief intellectual property strategist at the mobile technology vendor, took aim at some provisions in the just-announced Patent Reform Act of 2011 during a forum on patents and job creation in Washington, D.C. Senator Patrick Leahy, a Vermont Democrat, announced Thursday that he and other lawmakers would introduce the legislation next week.

Martin focused on a provision in the bill that would limit damage awards in patent infringement cases. "Limitations on remedies from where they are now can only logically destroy value in patents, essentially wipe it out," he said. "It focuses too much on the benefits to the infringer, and not enough on the harm to the patent holder."

Leahy and other senators have been working since 2006 to revamp U.S. patent law. Several large technology vendors, including Intel, Microsoft and Apple, have been pushing for patent reform for years, spurred by several multimillion-dollar patent infringement awards from U.S. courts in recent years. Backers of comprehensive patent reform have argued that it's too easy for patent holders to win huge awards when a court finds that one small piece of a product infringes a patent.

Backers of patent reform, including several Republican lawmakers, have also complained that in many cases, patent holders bringing lawsuits aren't bringing products to market based on their patents.

The Patent Reform Act, to be introduced Tuesday, mirrors a compromise bill that the Senate Judiciary Committee announced last March, Leahy, the committee chairman, said in a press release. Congress failed to pass that legislation after opposition from several groups, including small inventors and small tech companies.

The compromise bill had support from President Barack Obama's administration, several labor groups and companies including IBM, Microsoft and General Electric, Leahy said.

The proposed changes in patent law would spur innovation and create jobs, Leahy and other sponsors said.

"Patent reform is a commonsense, bipartisan effort to protect jobs and bolster the economy," Leahy said in a statement. "This will be the first piece of legislation considered by the Judiciary Committee this year, and I hope the Senate will act promptly on this job-creating bill. Action by Congress can no longer be delayed."

The legislation would allow third parties to submit information about possible prior art while the U.S. Patent and Trademark Office is examining a patent application. It would allow new challenges to patents awards throughout the life of patents, and it would set limits on how damage awards are calculated by courts.

Leahy's bill would also make it more difficult for patent holders to provide willful infringement and receive enhanced damage awards, and it would give the USPTO new patent fee-setting authority in an effort to help the office deal with its backlog of 700,000 patent applications.

But companies backing a patent overhaul are ignoring the long-term effects for a short-term gain, Martin said Friday. The weakening of patents will lead to less innovation in the U.S., which will damage the economy, he argued.

Instead of a major overhaul, Congress should focus on allowing the USPTO to keep all its fees, instead of sending millions of dollars back to the U.S. treasury, said Robert Alt, senior legal fellow at the Heritage Foundation, a conservative think tank. The extra fees would allow the USPTO to hire more patent examiners and cut the applications backlog, he said.

A person connected to the Patent Reform Act has already apologized about it, said Gregory Junemann, president of the International Federation of Professional and Technical Engineers. "I just heard from somebody who said, 'Don't be too upset, it's not a great bill, but we'll take the bad stuff out,'" Junemann said. "Why don't you propose something good and make it better? Wouldn't that be a switch?"

But David Kappos, director of the USPTO and a former intellectual property lawyer at IBM, told the same audience that it's time to make changes to the patent system that will help the U.S. economy moving forward, after lawmakers have been debating patent reform for nearly 10 years.

"This is the Congress that I believe we actually can, should and must finish the work of those many, many years," he said. "Parties have debated proposals and amended language many times to where we now have key provisions that most parties support and that, without a doubt, will add more certainty to litigation and ... help companies create more jobs and put new and better products in the marketplace."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.